CHICAGO — The flat-rate pay system, which assigns specific amounts of time to do vehicle repair and maintenance work, was a key issue in last year’s strike of service technicians at Chicago-area auto dealerships. Flat-rate is a blessing to techs who can regularly beat “book times,” but a curse to others who can’t always complete jobs in the allotted times.
The system, in place for decades, provides an incentive for techs to work faster, so they can book 50 or more hours a week while working only 40 and thus earn additional pay. It also enables dealership service departments to boost revenue by billing more labor time.
Tom Shirey, dealer principal of Shirey Cadillac in Oak Lawn, Ill., defends the incentive-based flat-rate system. It provides the same motivation traditionally used on the sales side of a dealership and increases shop efficiency, he says.
“When the mechanic is on the incentive system, if he does the work correctly and fixes the problem, then he gets on to the next job without wasting any time,” Shirey told Fixed Ops Journal. “The only thing we sell in the service department is time. The more efficiently we use time, the better the end product is going to be for the mechanic, the dealership and the customer.
“If there is no incentive and they’re on a 40-hour guarantee, you’re basically putting them on a weekly salary,” he adds. “We wouldn’t have been on an incentive system all these years if there were a better way.”
Beat the clock
Union-represented technicians say that beating the clock under the flat-rate system isn’t easy, even for experienced mechanics. That can affect the quality of repairs, they argue.
“It promotes shoddy work because it makes a guy have to turn hours,” said John Buttney, a journeyman technician at Haggerty Buick-GMC in the Chicago suburb of Villa Park, Ill.
Customers often tell a service adviser that a “noise is coming from somewhere,” Buttney adds, and that’s the only guidance the tech will receive. That lack of information forces techs to spend valuable time chasing the elusive noise or an electronic gremlin and fall behind schedule.
“It can be just [a loose] heat shield or something like that, and then you get paid a few tenths [of an hour] to fix it,” Buttney says.
Sam Cicinelli, a leader of the union that represents Chicago dealership technicians, says techs frequently encounter problems that increase repair times while the flat-rate clock keeps ticking.
“You strip a bolt, and now you’ve just lost on that job because it’s taking you that much longer to replace a strut because one of the bolts is stuck on the housing,” Cicinelli says. “They have to get a torch, heat it up, tap it out or cut it off.”
Chris Becktel, a journeyman tech at Toyota of Naperville, says there is enough work at his shop that he can usually book more than 40 hours a week. But he is under constant pressure to beat the clock while tackling difficult jobs, he adds.
“The most skilled, highest qualified guys are usually given the worst work,” Becktel says. “They know the less qualified guys can’t fix it.”